The Claimants are the beneficiaries of two trusts created by the late WCC Henchley dated 1 September 1960 and 12 September 1960. He died in 1972. By this claim the Claimants seek an order directing the Defendant to provide a full account of his dealings with the assets of the two trusts as a trustee or as a de facto trustee. I have used the latter description of the role he is said to have performed, if he had not been properly appointed as a trustee, in preference to describing him as a trustee de son tort. Both descriptions are opaque but, as Lord Millett remarked in Dubai Aluminium v Salaam[2003] 2 AC 366 [at 138], it is preferable to substitute dog Latin for bastard French.

Mr Henchley was married twice and had children by both marriages. He had two children by his first marriage to Vera, named Patricia and Vivien. Patricia is married to the Defendant. By his second marriage to Nancy, Mr Henchley had four children, Julian, Elizabeth, Claire and Alexander. Vivien, Elizabeth and Claire together with Vivien and Claire's children are the Claimants. I will refer to them throughout this judgment, where necessary, using their given names. By doing so, of course, I intend no disrespect. It is merely a convenient shorthand.

The NE Henchley Trust ("The Henchley Trust") was settled by a deed dated 1 September 1960. It provided for the trust's assets to be held for Nancy, the settlors' wife, for her life and thereafter for the settlors' children. The two principal clauses of the settlement provided as follows:

"1 THE Trustees shall hold the property upon trust that the Trustees shall with consent in writing of the Settlor during his life and after his death with the consent in writing of the wife during the remainder of her life or until her remarriage and after the death of the survivor or on their remarriage of the wife at the discretion of the Trustees sell the same at such time or times as the Trustees shall think proper so that they shall have full power to postpone the sale of all or any part thereof without being responsible for any loss which may result therefrom.

2 The Trustees shall hold the net proceeds of sale and any other monies applicable as capital and the net rents and profits until sale on trust for the wife during her life or until her remarriage and after her death or remarriage upon trust for the children of the Settlor then living if more than one equal shares absolutely and if any child shall then have died leaving issue him or her surviving such issue shall the share in the trust fund which his or their parent would have taken if he or she had been living and if more than one in equal shares absolutely."

The second settlement is the WCC Henchley Trust ("The Childrens' Trust") which was created by the settlor on 12 September 1960. The settlement deed has not survived but there is no dispute about the terms of the trust because its terms were referred to in a letter from Julian to the Defendant dated 9 December 1991. In summary:

i). The assets of the trust were to be divided into two parts.

ii). Julian and Alexander were entitled to the capital of one such half outright upon reaching the age of twenty-one.

iii). As to the other half, Elizabeth, Vivien and Claire were entitled to an equal share of the income for their lifetime. Thereafter, their children and their children'schildren would be entitled to that income pending the dissolution of the trust twenty-five years after the death of "Prince Edward".

Mr Henchley's will made no provision for his children on the express basis that they were already provided for under the terms of The Childrens' Trust and the will records that Mr Henchley had settled as trust assets his shares in Fullers Studios Limited, Renoir Litho Limited, Renoir Display Limited and Tru-Tone Photo Litho Limited ("the Companies"). These were all family businesses which were run by Mr Henchley up to his death.

It is also clear in relation to The Henchley Trust that Doris Watson and Walter Martin were validly appointed as trustees of that trust. Mr Martin died on 26 February 1996 and Ms Watson died on 3 March 2003. Such documents as there are suggest they were also trustees of The Childrens' Trust along with the Defendant.

"The absolute minimum that a trustee must do if there is to be a trust is that he must (1) at least hold and safeguard the trust property, (2) provide information to the beneficiaries concerning the terms of the trust, so that they are in a position to check that the trusts are being carried out, and (3) keep accurate and reliable accounts and records of his custodianship to prove that the trusts are observed. Accountability of the trustees to the beneficiaries is one of the fundamental defining features of the trust; the trustee cannot be allowed to treat the trust property as his own; he cannot be relieved of his duty to explain his custodianship; and the beneficiary cannot be deprived of the information he needs to check on, and possibly the trustees' performance." [my emphasis]

"Since the judicature reforms the court has enjoyed a discretion whether to order a general account even once the requisite relationship is proved, and it will not do so where the effect of the reversal of the onus of proof would be "to enable the plaintiff to blackmail the defendant, or where the account is unnecessary or unlikely to be fruitful."

"Once the trust or fiduciary relationship is established or conceded the beneficiary or principal is entitled to an account as of right. Although like all equitable remedies an order for an account is discretionary, in making the order the court is not granting a remedy for wrong but enforcing performance of an obligation."

The reference in the passage in Snell's Equity to blackmail derives from the decision in Campbell v Gillespie [1900] 1Ch 225. In that case certain businesses and property were held on trusts for the benefit of the Claimant's creditors. The Defendant acted as the trustee. The estate was re-conveyed to the Claimant and the re-conveyance contained a recital that the Claimant's debts had been paid. At that stage a detailed account was not required and not long afterwards the trustee destroyed all the books of account. The Claimant then alleged that the trustee had acted fraudulently and brought a claim for fraud and an account on the basis of wilful default. Those elements of the claim were not pursued and the Claimant instead sought an order for a common account. The judge, Cozens-Hardy J, decided that he had a discretion under the then applicable rule, Order 55 rule 10, to decline to make an order for an account and although he felt "unable to acquit the defendant of some misconduct" declined to make an order to direct a common account from 1887  1896 as to do so " would be to enable the plaintiff to blackmail the defendant."

I am unable to accept Mr Wilson QC's submission that the court is bound to order an account and the court has no discretion where there has been a failure to account and no release. To my mind that puts the position far too high. The view expressed by Lord Millett in Libertarian Investments Limited, although not strictly binding on this court carries very considerable weight as do the views of the commentators to which I have referred. There is no absolute entitlement to obtain an order for an account. It is one thing for the duty to account being part of the irreducible minimum obligations of trustees, but quite another to say that the court must always, without exception, make an order for an account to be provided. The duty and an entitlement to an order from the court are quite different. I can accept, however, that the court will, in the exercise of its discretion, ordinarily make an order for an account where an account has not been provided and furthermore, there may be very limited circumstances in which the court will decline to make such an order. Nevertheless, it is plain to my mind there is a discretion even if it is one which will be applied sparingly. I will discuss later in this judgment how such a discretion may be exercised, but even a lengthy delay in requesting an account may be of limited assistance to the trustee, in the absence of a release, because without an account the beneficiaries do not know what has happened to the trust income and assets. All the more so, where there are succeeding generations of beneficiaries who neither have, nor could have, any direct knowledge of how the trust assets have been managed and distributed.

I would also observe that the remark by Cozens Hardy J in Campbell vGillespie concerning the ability of the beneficiary to "blackmail" the trustee is a curious one. Perhaps it goes no further than indicating that the court may exercise its discretion to decline to make an order for an account where to do so would either put the trustee in an impossible position due to the destruction of records, or place undue and unfair pressure on the trustee due either to a lapse of time or conduct which is short of a form of release. Blackmail is used in this very loose way and the notion of oppression is more apt.

" an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of 6 years from the date on which the right of action accrued.

For the purposes of this subsection, the right of action shall not be treated as having accrued to any beneficiary entitled to a future interest in the trust property until the interest fell into possession."

"An action for an account shall not be brought after the expiration of any time limit under this Act which is applicable to the claim which is the basis of the duty to account."

At the hearing, the submissions revolved principally around the proviso to section 21(3) and the relevant date for the dissolution of The Childrens' Trust. Have the interests of the fourth to ninth claimants vested? If not, the period of limitation has not started to run. The trust period is agreed to be 25 years after the death of "Prince Edward". However, due to the date of the trust, the reference to Prince Edward cannot be to the Prince Edward who is a son of the current monarch, because he was born after the trust came into being. It is a matter of conjecture who the draftsman may have had in mind but it is an issue that I cannot determine. The issue was not fully argued and there is no evidence relating to it. There is no other sensible basis upon which to proceed other than to assume for the purposes of this application that the interests of the fourth to ninth Defendants have not vested. This was the way in which the claim proceeded up to the hearing. In due course, the issue of construction will need to be resolved.

The position in relation to The Henchley Trust is relatively straight forward. The house which is the principal, and possibly now the only, asset of the trust is occupied by Nancy and Elizabeth. The property is substantial and is estimated to have a current value of approximately £3,000,000. The Defendant has no recollection of what may have happened to the share portfolio which is referred to in the Deed of Appointment. He has no recollection of how the shares were dealt with, when they were sold or what became of the proceeds of sale. As with The Childrens' Trust, he says he maintained no records himself of the trust. Any records were held by Doris Watson as the trusts' bookkeeper and record keeper. In any event, he points to the near certainty that the shares named in the 1972 deed would have no value now (they included, for example, shares in Turner & Newall Limited). The Defendant's brother-in-law Julian claims to have contributed over £400,000 to pay insurance, maintenance and building costs for the property and had there been any value in the share portfolio it would certainly have been used up long ago in maintaining the property. The Defendant says, therefore, he has no information which he can provide and to order an account would be an entirely pointless exercise. He was unaware until it was pointed out to him relatively recently that his name remained on the title.

The relevant facts relating to The Childrens' Trust are far more contentious. There is, however, helpful information dating from the early 1990's some of which has been obtained by Claire from HMRC. Their records are limited but they are stated to show that The Childrens' Trust closed in 1996. By "closed" HMRC means that no further tax returns were issued to the trustees for completion but it does not necessarily mean that the trust ceased to exist. HMRC is unable to explain why a decision was taken no longer to issue tax returns from 1996. It is also of note that HMRC's records about the identity of the trustees in 1996 do not suggest that by that date the Defendant was still a trustee although their records are plainly imperfect because HMRC has consistently stated that Claire was a trustee at that time which is undoubtedly incorrect. It seems very likely that the appointed trustees in 1996 were Doris Watson, Jonathan Sharp and Martyn Scarterfield.

The only document which could meaningfully be described as accounts were prepared by Hunter Jones Halford & Co, a firm of Chartered Accountants, who acted for the trustees. The accounts comprise a balance sheet as at 5 April 1991 and an income and expenditure account for the year ended 5 April 1991. Comparative figures are shown for the previous 12 month period and year end. There are, in addition, notes to the balance sheet and income and expenditure account providing some further explanation. The copy of the accounts which has been located are neither signed by the accountants nor the trustees. They have been described in the defendant's submissions as "audited trust accounts". To my mind, that is a misleading description. First, the accounts have not been audited as such. The accountants may have signed a report described as an "auditors report" but the accounts have merely been prepared from books, vouchers, information and explanations received and they are certified to be in accordance therewith. That is some considerable distance from an audit which implies a degree of interrogation such that the accounts can be considered to be robust. Furthermore, the accounts are in the form of business accounts rather than trust accounts. The distinction is, I consider, an important one.

"Every beneficiary is entitled to see the trust accounts, whether his interest is in possession or not",

Master Matthews went on to say:

"11. There is some danger of misunderstanding here. When the books and cases talk about beneficiaries "entitlements to accounts" or to trustees being "ready with their accounts" they are not generally referring to annual financial statements such as limited companies and others carrying on business (and indeed some large trusts) commonly produced in the form of balance sheets and profit and loss accounts, usually through accountants, and  in the case of limited companies  filed at Companies House. Instead they are referring to the very notion of accounting itself. Trustees must be ready to account to their beneficiaries for what they have done with the trust assets. This may be done with formal financial statements, or with less formal documents, or indeed none at all. It is no answer for trustees to say that formal financial statements have not yet been produced by the trustees' accountants."

i). As at 5 April 1990 The Childrens' Trust had a portfolio of quoted investments valued at £78,008. However, during 1990 a loss on disposal of quoted investments of £25,659 was incurred and during 1991 the loss was £64,346. By 5 April 1991 the entire share portfolio had been liquidated at a substantial loss. Even taking into account the fact that 1990 and 1991 were years of economic recession, the loss is surprisingly large. It might suggest that insufficient thought had been given to the spread of investments.

ii). In both financial years the balance sheet records as assets sundry debtors. The notes reveal that as at 5 April 1990 PIMS International PLC owed the trust £18,094. As at 5 April 1991 the debt was £37,475. The notes also record that Nancy's liability to the trust increased from £904 as at 5 April 1990 to £12,684 as at 5 April 1991. She is recorded in the notes to account as a trustee of The Childrens' Trust but, as I have indicated, the evidence for her being a trustee is slight and indeed this is the only occasion where she has been referred to as a trustee. In any event, the point remains that the trustees were apparently lending money to Nancy at a time when the trusts assets were facing significant losses and substantial liability to tax.

iii). The balance sheet for each year shows a liability to taxation. In 1990 it was £58,758 and 1991 it was £59,477.

Various tax computations are also available together with income schedules for Elizabeth, Vivien and Claire. They confirm that each of them received £10,000 at the age of 30 and that there was no trust income in 1989, 1990 and 1991. The schedules show individual tax liability for, in the case of Patricia, 1974 to 1988 (it is a shorter period for the other two) but the trust income is shown in a column marked: "Net amount should have been paid". This rather odd heading suggests the income had not in fact been received, but why that might be is unclear. A further tax calculation has been located which is headed "Computation of income vesting in beneficiaries" showing income up to 1984. It is plain that The Childrens' Trust was active and income producing up to that date. The aggregate income that was distributed in that year was slightly in excess of £16,000.

i). A letter from the Defendant to Vivien dated 17 January 1991. It appears that Vivien had been critical of Julian, albeit his role in relation to the trusts is unclear. The Defendant states that he had tried without success for over 10 years to "liquidate the funds but could not tie down the Inland Revenue". He reports to Vivien what he describes as the "good news" that Patricia, Julian and Alexander had agreed to waive their rights to benefit from The Henchley Trust. He goes on to say:

"This action should more than compensate for the problems on the other trust, because it means that you, Elizabeth and Claire will each receive one third of the [Henchley Trust] instead of one eighth."

He also mentions the involvement of Roy Copus who is, or was, involved with the trust. Mr Copus had further involvement with the trust in the early 1990's and in the Defendant's first witness statement he describes Mr Copus as someone who he currently employs. Mr Copus has been able to produce some additional documents recently in the circumstances explained in the Defendant's second witness statement. He is described there as someone who works for a company owned by the Defendant and his family. The Defendant, in any event, makes it clear in his 17 January 1991 letter that there was little likelihood after tax had been paid of anything being left to distribute to the beneficiaries (he is presumably referring to The Childrens' Trust).

ii). On 5 February 1991 Patricia, Julian and Alexander executed a document purportedly renouncing any interest in both trusts in favour of Vivien, Elizabeth and Claire. The effect of the document is in doubt. However, the document was signed by both those who were renouncing and the other beneficiaries who are some of the Claimants to this claim.

iii). On 9 December 1991 Julian wrote to the Defendant amongst other things summarising the terms of The Childrens' Trust. He appears to have had quite extensive dealings with the Inland Revenue and have made unsuccessful attempts to "liquidate" The Childrens' Trust. He suggests the Inland Revenue will not allow it to be liquidated.

iv). On 12 December 1991 Neil Baxendale (Elizabeth's husband) wrote to the Defendant. He expresses his understanding that there will be no monies remaining in the trust and refers to payment of the outstanding tax liabilities. Clearly he is referring to The Childrens' Trust. He expresses a desire " to see this matter settled once and for all as soon as possible."

v). On 18 December 1991 Mr Kay of Barker Hibbert & Co wrote to Vivien saying he had looked through the accounts for the years from 1983 to 1991. He refers to advances having been made to PIMS and to there being very little left in The Childrens' Trust. He offers Vivien a copy of the 1991 accounts. On the same day Mr Kay wrote to Mr Sharp of Hunter James Halford & Co referring to the payment of tax " in respect of the income from the trust [Vivien] did not receive." On 23 December 1991 Mr Sharp wrote to Vivien explaining how the sum shown as drawn by her in 1987 was made up.

vi). On 14 January 1992 Patricia wrote to Vivien and her husband enclosing two cheques one of which is for Vivien's outstanding income proceeds from the trust. This must be a reference to The Childrens' Trust. She concluded the letter by saying:

"I am really pleased that we have managed to just about sort out the trust affairs now. Arrangements are now going ahead to appoint new trustees for the [Henchley Trust]  most probably a bank."

vii). On 9 March 1992 Mr Copus sent a fax to Patricia referring to both trusts. So far as The Childrens' Trust is concerned, the arrangements he had in mind were intended to lead to the trust being wound up once tax issues had been dealt with and Julian had repaid borrowings plus interest. Curiously he said that "any residual cash shortfall in trust to be settled out of Hillsdown Court", that being the name of the property occupied by the Defendant and Patricia. With regard to The Henchley Trust he describes 395 Cockfosters Road as the sole asset of that trust and proposes that a professional trustee be appointed. Similar sentiments are expressed in a letter from Mr Copus to Patricia on 11 May 1992. He says the plan is to wind up The Childrens' Trust as soon as possible, the only significant asset being the debt due from Julian. Any tax shortfall was to be met by Patricia. He also said:

"In view of the fact that this trust [The Childrens' Trust] is about to be wound up, there is probably little point in making any further changes to the trustees as the final negotiations with the Inland Revenue can be looked after by Mr Sharp and myself."

viii). A letter from Mr Copus to Mr Sharp of Hunter Jones Halford & Co dated 9 July 1992 says he has been told by Patricia that Mr Sharp and Julian have been appointed trustees to The Henchley Trust. This is consistent with a letter from Mr Sharp to Julian dated 2 May 1997 enclosing the tax return for The Henchley Trust for him to sign. However, there are indications in the documents which suggest that Mr Sharp was only appointed a trustee in 1999 and doubts about whether Julian was ever appointed.

So far as The Childrens' Trust is concerned, the Defendant points to the trust having made substantial distributions in 1983 and 1985 respectively to Julian and Alexander in accordance with the terms of the trust. Each of Elizabeth, Vivien and Claire received £10,000 on their 30th birthdays and there is evidence of other distributions. In about 1991 Elizabeth received over £20,000 of income from the trust in order to help settle her litigation with Julian concerning a loan. School fees were paid out to pay for the private education of Elizabeth, Claire and Alexander. Other expenditure was met from the trust. In short the Defendant says that by 1991, taking into account tax liabilities, the trust had virtually no assets left and the position revealed in the 1991 accounts is a true and accurate one. Aside from information gleaned from the documents to which I have referred, he is not able to provide any further assistance save that he acted as 'peacemaker' in 1991 to resolve differences between the beneficiaries concerning the trusts and he believes that The Childrens' Trust was wound up.

"In my view, the claimants 'reply' evidence changes nothing. It does not change the fact that (despite the claimants' denials) full, audited accounts were provided to the sisters up to 1991. This was followed by a 25 year gap during which time the trusts record keeper and professionals involved destroyed their records pertaining to the trusts. Nor does it change the fact that I have no further information to provide the claimants and no ability to reconstruct this information at this stage."

i) Information relating to the companies belonging to The Childrens' Trust only emerged recently and she had no reason to believe that "improper transactions had taken place".

ii) She has attempted to resolve issues in an amicable way without resort to proceedings.

iii) It was her appointment as a trustee of The Henchley Trust in 2012 which caused her to investigate the position in relation to that trust and it was in the context of the enquiries she pursued in that connection arose concerning The Childrens' Trust.

iv) She suggests that the management of the two trusts by the trustees was chaotic and this has contributed to the delay. She says that it was unclear whether there was one trust or two and that Defendant has contributed to this confusion.

v) In any event, even if she and her siblings could be criticised, no such criticism attaches to the other claimants who belong to the following generation.

The position in relation to The Henchley Trust is rather less acute than The Childrens' Trust. The principal asset of The Henchley Trust is a property and that asset has been preserved. The evidence shows that substantial contributions from outside the trust have been required to provide the outgoings on the property and there is every reason to suppose that the modest portfolio of shares which is referred to in the 1972 deed of appointment would have been exhausted many years ago on routine outgoings for the property. It is troubling, however, that, apparently, no accounts for this trust have ever been prepared in any format. The trustees from time to time have singularly failed in an important obligation.

It is significant that the terms of this trust were not intended to benefit the settlors' grandchildren save in the event of one of his children pre-deceasing Nancy. The childrens' interests under this trust will vest upon Nancy's death. Based upon the Defendant's evidence, the property is the only asset within the trust and I consider that the circumstances are sufficiently exceptional to persuade me that the court should not exercise its discretion in favour of ordering an account in common form. The value of the portfolio of assets other than the property as at 1972 was modest and there is no realistic possibility of the Defendant providing any information about its disposal or the use to which the proceeds were placed. Although I consider that the request for an account was a proper and reasonable one, I will decline to make an order.